A company has a volume licensing agreement with a software vendor that allows for the deployment of new software instances throughout the year. The agreement specifies an annual review to align the number of licenses in use with the number of licenses owned. What is the primary purpose of the "true-up" process that occurs during this review?
To purchase licenses for the net new software instances that were deployed over the past year, ensuring compliance.
A mandatory, vendor-led audit intended to discover and fine the company for non-compliance.
To receive a credit from the vendor for any licenses that were underutilized or decommissioned.
To renew the master enterprise agreement for another term and upgrade all existing software versions.
The correct answer describes the true-up process, which is a standard part of many volume licensing agreements like the Microsoft Enterprise Agreement. A true-up is an annual reconciliation where an organization assesses its software usage over the past year. If the organization has deployed more software than it is licensed for, it must purchase additional licenses to cover the overage and remain compliant.
The other options are incorrect. Most agreements do not offer a credit or refund (a "true-down") for underutilized on-premises software licenses. A true-up is a customer-driven reporting process, not a formal, punitive audit initiated by the vendor, although failing to true-up could lead to an audit. Finally, upgrading to new software versions and renewing the master agreement are separate business and contractual events from the annual true-up for license quantity.
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